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UOB KAYHIAN |
UOB KAYHIAN |
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Keppel Pacific Oak US REIT (KORE SP) 3Q24: Gradual And Steady Recovery With Stable Occupancy
Portfolio occupancy eased 2.0ppt qoq to 88.7% in 3Q24 due to known vacates at The Plaza Buildings in Bellevue, which management has cautioned previously. Leasing activities increased 9.6% qoq at growth cities in the sunbelt. KORE’s physical occupancy improved 3ppt qoq to 73% in 3Q24. The gradual but steady recovery paves the way for KORE to resume distribution in 2026. KORE trades at 2026 distribution yield of 15.9% and P/NAV of 0.37x. Maintain BUY. Target price: US$0.38.
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Keppel (KEP SP) Displaying Continued Strong Execution
KEP’s 3Q24 business update showed that it continues to execute strongly with the key highlight being a 68% yoy jump in asset management fees to S$299m for 9M24. Data centres were a key focus during the analyst call, with management pointing to multiple fee-generation opportunities due to its position as an asset manager and operator. In addition, the company noted its growing power footprint in Singapore that could reach nearly 3GW by 2030. Maintain BUY. Target price: S$8.89.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Nestle Malaysia (NESZ MK) 3Q24: Soft Purchasing Power Hits Hard
Nestle’s sales moderated at a sharper rate but a gradual improvement is expected, with growth anticipated to return in 1H25. An ASP revision mitigated high input cost but was more than offset by diseconomies of scale. The sharp earnings contraction is within our expectations, but disappointed consensus. Along with uninspiring earnings growth, Nestle’s current valuation of +0.5SD is no longer appealing. Maintain HOLD and target price of RM114.00.
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OUE REIT (OUEREIT SP) Stable performance
Commercial segment offsets weakness in hotels 3Q business update saw NPI down 3.7% YoY. Higher property taxes for hotels, lower contribution from Lippo Plaza Shanghai and high base effect for hotels from prior year led to the decline. Singapore office occupancy inched up while reversion was positive but moderating. Hotel RevPAR stayed relatively flat with HSO declining from a high base last year. Gearing and debt cost inched up. We cut estimates on lower margins and trim our TP to SGD0.34 from 0.36. Retain BUY on 6.5% yield and 0.4x PB.
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PHILLIP SECURITIES |
LIM & TAN |
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OUE REIT DPU supported by resilient rental reversion
• Gross revenue for 3Q24 slipped by 1.2% YoY to S$74.8mn, in line with our forecast. 9M24 revenue forms 74% of our FY24e estimates. NPI was down by 3.7% YoY to S$60.3mn and was within our estimates, forming 73% of our FY24e forecast. The decline was mainly due to both hotels' upward revision of property tax.
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Mapletree Pan Asia Commercial Trust / MPACT ($1.41, down 1 cent) has announced its financial results for 2Q FY24/25 and Financial Period from 1 April 2024 to 30 September 2024. The results underscore the resilience of its Singapore portfolio amid diverging overseas currents. 2Q FY24/25 gross revenue and net property income (“NPI”) were lower by 6.1% and 8.5% year-on-year (“yoy”) to S$225.6 million and S$167.7 million, respectively. This largely reflects reduced contribution following Mapletree Anson’s divestment on 31 July 2024, and lower contributions from the overseas assets, further impacted by the strengthening Singapore dollar. However, the Singapore assets demonstrated strength, with gross revenue (excluding Mapletree Anson) rising 0.7% yoy. This growth was led by the continued robust performance of flagship asset, VivoCity, despite its contribution affected by the Basement 2 asset enhancement initiative (“AEI”) and tenant rejuvenation impact. At the last traded price of $1.41, MPACT is capitalized at $7.4bln and trades at 0.8x P/B and 5.8% annualized div yield. Bloomberg consensus target price of $1.52 implies a potential return of 7.8%. We believe MPACT provides a safe bet to play on the Fed’s interest rate cuts given its decent yield and upside to consensus target price and also defensive asset portfolio. We maintain an Accumulate rating on MPACT. |
